Mickey Kaus (and everyone else) missed a big loophole in McCain-Feingold. Basically, the thousands (tens of thousands?) of people who have a huge vested interest in thwarting the goals of CFR have worked out a way to thwart the goals of CFR. Well, who'd have guessed?

The mistake is thinking that this is bad.

The competitive market model works on the belief that hordes of ordinary people working to address similar problems will be more effective than a handful of super-smart people laying down rules for all to follow. That's why the competitive marketplace delivers canned peas better than the Soviet Central Planning commission, and it's why the marketplace for political influence will overwhelm the McCain-Feingold central planners.

Ultimately McCain-Feingold will only work if people don't care enough to try to thwart it. I can think of only two circumstances in which that holds: 1) Overnight everyone stops trying to improve his own situation, or 2) The government becomes so insignifigant that influencing it isn't worth the trouble. We should all yearn for number 2. But it ain't here yet.

Jonah Goldberg weaves a reference to simulated child pornography into a rant about the hypocrisy of campaign finance reform. Included is the following observation:

We allow the most extreme stuff, the stuff out on the periphery of social and legal behavior for the simple reason that if we allow the stuff on the fringe, the freedoms at the core of our constitutional order will be preserved. For people who zealously defend our Second Amendment rights, this means arguing about the right to carry concealed weapons into churches, schools, airports, wherever.

That’s not usually why I want to allow the most extreme stuff. To me a fundamental principle of a free society is: “everyone is allowed to do whatever he wants as long as he doesn’t harm anyone else.” Many people who are too clever for their own good use all sorts of verbal gimmickry to pick this idea apart. I think it holds up.

Jonah’s “fringe” argument applies to gun control, where just about everyone agrees that somewhere between letter-opener and the proverbial basement housed nuclear device exists a line beyond which a weapon presents too much potential danger to innocent bystanders to allow in private hands.

But things like simulated child porn (i.e., “kiddie porn” created without using any actual kiddies in the creation) is of a different ilk. I agree that, for the normal reasons, children don’t necessarily fall under the above group of “everyone.” But banning adult only “child pornography” requires a different principle. I haven’t seen any other principle that comes close to besting my principle.

Steve Kuhn asks: Does parity really make sports more popular?

I suspect that the perception that your favorite team has reasonable chance of assembling and keeping a competitive team year in and year out is most important. This is the rub in both baseball and football.

The general opinion is that sports leagues are best off if the larger market teams are somewhat more likely to win championships (they have more fannies to put in seats), but not so likely that the small market fans just give up on the game. For the first time in my life it seems possible that without some sort of concerted effort by the league to rebalance the tables, baseball is headed that way. But it’s not as obvious as a lot of people think. Consider the following possibility: There are about 8 “big market teams”, and 22 “small market teams”. Supposed the typical year sees 5 big market and 3 small market teams in the playoffs. Not exactly “fair” in some global, know-it-all sense. But perhaps not so terribly off-putting.

A cool semi-related point: The leagues regularly defend things like the player draft and the exclusionary rule (the principle, overturned in the 70’s thereby ushering in the era of free gency, that only a player’s current team can negotiate to resign him…I have a sneaking suspicion that I have the name wrong) on the grounds that they enhance competitive balance. But guess what? The Coase Theorem applies to major league baseball! As long as trades can include a cash component, even without free agency, players will end up on the teams for which they provide the best return. Instead of paying money to the player, the teams will pay money to each other.

For goodness sakes Paul, get out of the business! Go back to writing popular economics. Please! You’re good at that.

It’s too long to post, but your latest screed is just embarrassing. Gore is “slightly left-of-center?” Did you watch the same campaign I did? Did you watch him savage the pharmaceutical industry like Huey Long taking on the fatcats? I'm not saying he's the second coming of Karl Marx, but "slightly" left-of-center? "Left-of-center" isn't wishy-washy enough? You've got to add in the "slightly?"

Does it make a shred of sense to compare a winner take all election between two serious candidates and a gaggle of minor hangers-on with a preliminary election between a bunch of candidates with semi-serious support in a country with much more of a multi-party tradition than we have? The dynamics are so different that it’s tendentious at best to try to extract any meaningful comparison.

We know you hate Bush. I don’t particularly care for Bush either, although I think he’s probably better than the alternative. But you can be so much more insightful, if you’d just get off of the BUSH IS THE DEVIL BUSH IS THE DEVIL BUSH IS THE DEVIL mantra. Sheesh!

From the Volokh Brothers sample test question:

Critical Legal Studies: I am the egg man. I am the walrus. Deconstruct. Explain relevance to ruling-class influences in farm subsidies and the law of the sea. Should it be "I am the egg person"? Goo goo goo joob.

An accounting professor once explained his dry exam question references to Company A and X Inc. by recounting a student complaint that his John, Paul, George, and Ringo exam questions made one women unable to concentrate for all the Beatles tunes running through her head during the test period. He actually gave her a re-test!

BTW, the below post on Coase wasn’t meant as a direct criticism of Steve, whose blog is full of great posts. It’s meant to fuse Steve and Megan’s themes. By any reasonable stretch, all professional sports leagues have a fairly large degree of monopsony power (a monopoly sells, a monopsony buys), and I’m sure they try their hardest to suppress player incomes. OTOH, almost all of the players would be willing to play for a tenth of what they are actually making. Some a whole lot less than a tenth. That cuts against any super-strong moral judgements. And economically, monopolies and monopsonies aren’t inefficient because of the prices they charge per se. They are inefficient because of the socially beneficial trades that that don’t happen because of the inefficiently higher or lower prices. It’s pretty safe to say that in the no one is dissuaded from becoming a professional major league athlete by insufficiently high salaries.

In fact, one could make a not unreasonable case that an economically inefficient number of people fritter their lives away in fruitless attempts at winning the big time sports riches lottery. As an argument that’s a little too social engineering-ish for my tastes, but it’s not completely unreasonable.

It’s telling that Ronald Coase is a free-market hero (my main computer is named in his honor) even though both of his pathbreaking articles can be understood as explaining the limitations of market interactions. (After taking Coase 101 from Megan, try out Coase 401 from David Friedman.) Contrary to what you’ve heard, favoring free-market policies is not the same as being reflexively anti-government or reflexively anti-central organization. Rather, it reflects a certain (deeper, richer, clearer) understanding of how the world works.

Hoo Boy! Two of my favorite topics. Megan McArdle weaves together a wonderful tale explaining the Coase Theorem and Nash Equilibrium, before finally conceding that they have little to do with one another, and Steve Kuhn calls the NFL owners a bunch of socialists for holding a players draft.

While John Nash won his Nobel Prize for One Big Idea, Ronald Coase won his for two even more revolutionary ideas. “The Nature of the Firm” changed the way economists think about firms almost as much as The Coase Theorem changed the way economists think about externalities.

Essentially, “The Nature of The Firm” started with the question “If markets and prices are so darned wonderful, why don’t you and your boss negotiate the terms by which you’ll do the next project?” Why, in fact, do you have a boss at all? Why aren’t you a freelance contractor, negotiating individual rates for everything you do at work during the day, right down to that 15 minute code tweak on that mailing label printing program?

Volumes have been written elucidating aspects of this issue, but they all come down to the same thing: transactions costs. Or, more broadly: “The costs of using market mechanisms instead of command and control.” It’s obvious that I’d spend more time negotiating than working if I negotiated the terms of every 15 minute code tweak. But even something like a six month, full time project, for which the time spent negotiating is relatively trivial, might be untenable to perform on a freelance basis if unpredictable changes is one of the project characteristics.

In a sports context, total profits are maximized in part by maintaining a viable league, which may or may not be consistent with each team acting purely as an individual entity trying to maximize its own profit. In Megan’s story, if Ken and Jeff had a commissioner overseeing their activities, they’d have been able to keep their 100 soda coupons a piece.

In a competitive market economy, the boundaries between firms and markets are determined by the relative benefits of market-type interactions vs. direct control type interactions, with hybrid types like franchises trying to pick the best of both. In general, firms that do a poor job of defining themselves vis-à-vis the market meet the same fate as widget firms that do a poor job of making widgets. A very reasonable case can be made that if the player draft was that tremendously exploitative, then the players would create their own competing league.

The press depiction of Jean-Marie Le Pen illustrates why this site is called LiberalPundit, even though in US political discourse free-marketeers like me are called "conservative." A label that tries to place Le Pen as presented by the NY Times and folks like me (and all of the bloggers on your left) under the same umbrella just makes no sense.

Historically, "liberal" has connoted openness to change, genuine diversity, and respect for individual liberty. That's why we favor things like vouchers over government run schools. I'd favor a voucher system even if I didn't think it would objectively improve education, because it would help parents choose the education they think is best, even if it's not the own I'd choose for my child.

It's also why we oppose things like CAFE requirements and punitive cigarette taxes that try to corral people into buying what government nannies think is best. The utter intolerance and sheer selfishness of the current anti-smoking zealots make me embarrassed to have spent my childhood hounding my father for his smoking.

And it's why even when we accept restrictions on liberty we don't do it enthusiastically. I might reluctantly agree that the modern welfare state might justify some restriction on immigration, but I'm not happy about it. I don't go out of my way to find more reasons for them.

"Liberal" is just the right description.

From the "Are They Serious" Dept:

How will the outspoken Mr. Smiley, whose political views start from the assumption that racism still permeates American society, fit in on NPR, where the appearance of an omniscient objectivity always seems to be the goal?

Uh, Earth to Times: (oh, you fill in the rest)